Change in kerbside recycling contractor

Nelmac’s recycling contract is ending this year after the council-owned maintenance firm decided not to tender, citing the high cost of replacing collection trucks.

Nelson City Council group manager infrastructure Alec Louverdis said from July 1, recycling services in Nelson would be managed through a joint venture between CanPlan and Northland Waste.

As per the council’s procurement policy, the contract was put out to competitive tender, and Nelmac chose not to take part in the tender process, Louverdis said.

The council-controlled trading organisation (CCTO) Nelmac Kūmānu employeds 280 staff and is owned by the council.

Nelmac’s acting chief executive Lindsay Coll said around five or six staff could be “negatively impacted” if Nelmac wasn’t successful in redeploying or transferring them.

Nelmac had reached out to CanPlan, and were trying to transfer as many people as possible, but were still in the process of working through options, he said.

Coll said the recycling contract “no longer fit” with Nelmac’s strategic direction, and significant investment would have been required to renew the fleet of vehicles at a time when Nelmac was presented with other growth opportunities.

“The current fleet is actually the original fleet, and they are all pretty tired.”

A base fleet replacement would have been about $1.5 million before considering any EV options, he said.

“It’s a significant amount of capital that is required, because it’s obviously such a capital intensive business, for something that is actually a very small part of the company.”

Asked if it would put a dent in Nelmac’s bottom line, Coll said it would make a “small impact“, but it was a trade-off between having to reinvest close to $2m into a business to make a small return.

“Three years ago, we exited the residential refuse business, and so this is sort of just the further step as far as what we see as stepping away from non-core activities … It’s not inconsistent with steps we have taken previously.”

Asked if the fleet could have been renewed sooner, Coll said it wouldn’t have made sense to replace the trucks when there was a contract end date, and when there was no certainty on term.

In terms of growth opportunities, Nelmac had tripled its team size in Marlborough to support landscape construction, with continued growth in design and architecture.

“Significant” projects were starting in Marlborough this month, he said.

Louverdis said there would be no change in service for Nelson residents — yellow bins would continue to be collected on the same day every two weeks.

Several of council’s recycling contracts had been held by Nelmac over the last 10 years and they had done a “great job in helping Nelson achieve its impressive recycling record,”, he said.

“It’s early days but council staff will work closely with Nelmac, CanPlan and Northland Waste to ensure a smooth transfer.”

CanPlan and Northland Waste’s tender for the service was exemplary and the council looked forward to working with them later this year, Louveridis said.

The change in contract would have no impact on ratepayers, as recycling services were held in a closed account and were “significantly” funded by the central government waste levy, the council said.

By Warren Gamble, Nelson Mail